Many people want to save money, but don’t know where to begin. The key to saving is to put away a little bit of money at a time.
Money expert Clark Howard says you can do that by having a financial goal in mind — a specific amount you want to save each month or year.
This Simple Math Equation Can Help You Save $1,000 a Year
We’re going to show you a really easy way to make that happen. And the good thing is that you shouldn’t have to dramatically change your lifestyle.
Here’s how it works: Let’s envision that you want to save $1,000 in a year.
If we make the assumption that you get paid every other week, that’s 26 paychecks in a year.
All you have to do is follow this simple math equation:
$1,000/Number of paychecks in one year = How much you need to save each paycheck.
Here’s our real-world example: $1,000/26 = $38.46
That means that you only need to save about $39 every paycheck to build up a $1,000 emergency fund in a year! Here’s how it works for other common pay period:
| Save From Weekly Paycheck |
Save From Bi-Weekly Paycheck |
Save From Monthly Paycheck |
| $19.23 |
$38.46 |
$83.33 |
Final Thoughts
If you find that saving $39 a month is a financial strain, look to see if you can cut out an expense. Check out these tips to reduce monthly expenses!
Also, in your journey to save, resist the urge to compare yourself to others. That’s the most self-defeating way to get thrown off track! Instead, set a realistic goal that you can handle without overextending yourself financially.
